Correlation Between Newcrest Mining and Newcore Gold
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Newcore Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Newcrest Mining and Newcore Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcrest Mining and Newcore Gold, you can compare the effects of market volatilities on Newcrest Mining and Newcore Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Newcrest Mining with a short position of Newcore Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Newcore Gold.
Diversification Opportunities for Newcrest Mining and Newcore Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Newcrest and Newcore is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore Gold and Newcrest Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Newcrest Mining are associated (or correlated) with Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Newcore Gold go up and down completely randomly.
Pair Corralation between Newcrest Mining and Newcore Gold
Assuming the 90 days horizon Newcrest Mining is expected to generate 1.11 times less return on investment than Newcore Gold. But when comparing it to its historical volatility, Newcrest Mining is 2.12 times less risky than Newcore Gold. It trades about 0.08 of its potential returns per unit of risk. Newcore Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Newcore Gold on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Newcore Gold or generate 43.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.31% |
| Values | Daily Returns |
Newcrest Mining vs. Newcore Gold
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Newcore Gold |
Newcrest Mining and Newcore Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Newcore Gold
The main advantage of trading using opposite Newcrest Mining and Newcore Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Newcore Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Newcore Gold will offset losses from the drop in Newcore Gold's long position.| Newcrest Mining vs. Wesdome Gold Mines | Newcrest Mining vs. Gold Reserve | Newcrest Mining vs. Osisko Gold Ro | Newcrest Mining vs. I 80 Gold Corp |
| Newcore Gold vs. Vertiv Holdings Co | Newcore Gold vs. Nasdaq Inc | Newcore Gold vs. McDonalds | Newcore Gold vs. Walmart |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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